- Grayscale suggests that trade tensions and tariffs could drive increased Bitcoin adoption as they lead to stagflation, benefiting scarce assets like Bitcoin and gold.
- The firm also notes that weakening confidence in the U.S. dollar could create space for alternative reserve assets, including cryptocurrencies.
In a new research report, Grayscale, a leading asset management firm, argues that rising tariffs and global trade tensions could pave the way for greater Bitcoin (BTC) adoption in the medium term. While economic experts often warn of the negative impact of tariffs—such as stagflation, or a combination of inflation and stagnant growth—Grayscale suggests these very challenges could benefit scarce assets like Bitcoin and gold.
The firm points out that higher tariffs typically result in inflationary pressure and slower economic growth. In traditional markets, this scenario spells trouble for equities and bonds. However, precious metals and digital assets like Bitcoin, often referred to as “digital gold,” are seen as safe havens during such periods. These assets are considered “hard money,” meaning they are resistant to inflation and devaluation, making them an attractive store of value when traditional financial systems face instability.
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Grayscale also highlights that the U.S. dollar’s dominance as the world’s primary reserve currency may face challenges in such an environment. Trade tensions could erode confidence in the dollar, making room for alternative reserve assets. This shift could include a growing demand for gold and cryptocurrencies like Bitcoin, which are decentralized and not subject to the control of any single government or central bank.
Bitcoin‘s increasing recognition as a legitimate store of value has already been bolstered by rising institutional interest and favorable policy changes in the U.S. market. In fact, the recent announcement of a 90-day pause on tariffs from President Donald Trump led to a surge in cryptocurrency prices, signaling that global trade dynamics could have a significant impact on the crypto market.
As Grayscale notes, historical trends suggest that a weakening dollar and higher inflation are likely to persist, which could ultimately benefit Bitcoin in the long run. With a solid foundation of growing adoption and a rapidly improving market structure, Bitcoin is positioned to thrive even amidst global economic uncertainty.
